Current through March 14, 2024
No claims-made policy shall be delivered, issued for delivery,
or renewed in this state by a licensed insurer on or after the effective date
of this regulation, unless such policy and the issuing insurer complies with
the following minimum standards:
(a)
Once a retroactive date is established with an insured, it may be advanced only
with the written consent of the named insured. Prior to the advancement of the
retroactive date by an insurance company, such insurer must obtain the written
acknowledgment of the named insured that the named insured has been advised of
the right to purchase the additional extended reporting period coverage. If no
retroactive date is specified in the policy, coverage is afforded for injury or
damage occurring prior to the inception date of the policy.
(b) Each claims-made policy shall provide an
automatic extended reporting period of at least thirty (30) days upon
termination of coverage.
(c) A
claim will be deemed "first made" when the insurer receives written notice of a
claim from the insured or a third party, but this shall not preclude an insurer
from utilizing either written notice of incident as the trigger of coverage
under the policy.
(d)
(1) Additional extended reporting period
coverage shall be made available for purchase by the named insured at any time
during the policy term and not later than thirty (30) days following
termination of coverage, including termination for non-payment of premium. Such
additional extended reporting period coverage shall apply only in regard to
that coverage terminated, and shall be made available on the same terms and
conditions as those specified in the policy.
(2) Where premium is due to the insurer for
coverage under the claims-made policy, any monies received by the insurer from
the insured as payment for the additional extended reporting period coverage
shall be first applied to such premium owing for the policy. The additional
extended reporting period coverage will not take effect until the premium owing
for the policy is paid in full and unless the premium owing for the additional
extended reporting period coverage is paid promptly when due.
(3) The insurer must advise the named insured
in writing of the automatic extended reporting period coverage and the
availability of, the premium for, and the importance of purchasing additional
extended reporting period coverage. This advice must be sent no earlier than
the date of notification of termination of coverage nor later than fifteen (15)
days after termination of coverage.
(4) The named insured shall have the greater
of thirty (30) days from the effective date of termination of coverage, or
fifteen (15) days from the date of mailing or delivery of the advice required
by subdivision (3) of this subsection, to submit written acceptance of
additional extended reporting period coverage.
(5) The premium charged for additional
extended reporting period coverage shall be based upon the rates for such
coverage in effect on the later of the date the policy was issued or last
renewed, and the insurer shall not charge a different premium for such coverage
due to any change in its rates, rating plans or rating rules subsequent to
issuance or last renewal of the policy.
(6) Upon termination of a claims-made policy
each insurer shall offer additional extended reporting period coverage for at
least the following specified durations:
(A)
unlimited extended reporting period coverage for professional liability
insurance policies;
(B) a minimum
one year period for policies covering (i) directors and officers liability,
employee benefits liability and fiduciary liability, and (ii) pollution and
environmental impairment liability; or
(C) a minimum three year period for all other
claims-made policies.
(e) Notwithstanding subsection (d) of this
section, unlimited additional extended reporting period coverage shall be
provided without additional cost to the insured if, while covered by a medical
malpractice policy, the insured:
(1)
dies;
(2) becomes permanently
disabled and is unable to carry out his or her practice; or
(3) retires permanently from practice:
(A) at or over age sixty-five and has been
insured with the same insurer on a claims-made basis for a period of at least
five consecutive immediately preceding years; or
(B) at or over sixty-two years of age and has
been insured with the same insurer on a claims-made basis for a period of at
least ten consecutive immediately preceding years.
(f)
(1) Where a policy has no aggregate liability
limit the insurer shall offer additional extended reporting period coverage
without an aggregate liability limit.
(2) Where a policy contains an aggregate
liability limit, the insurer shall offer additional extended reporting period
coverage with an aggregate liability limit at least equal to the aggregate
liability limit specified in such policy.
(g) The minimum standards may be waived if
application is made to the Commissioner and the Commissioner determines that it
would improve availability of coverage and not be detrimental to
policyholders.
